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Mortgage Refinancing - Mortgage Refinancing Information-You Can Avoid Paying Closing Costs When Refinancing Your Home When mortgage refinancing for the short term, you might significantly reduce your out-of-pocket expenses by avoiding closing costs. the is the no-fee, no-points mortgage you see advertised including you might use the type of mortgage to your advantage even though the lender is not being completely honest regarding the loan. Here are several tips to help you avoid paying closing costs at the time refinancing your mortgage loan. The catch lenders don’t talk regarding with their no-fee mortgages is that you do pay in the form of a higher mortgage interest rate. How might you tell if taking a higher mortgage rate is a fair trade off for not paying closing costs? To make the determination, first divide the sum of your potential closing costs by the amount of your mortgage loan. Suppose your closing costs are $3,800 on a $225,000 mortgage loan. Divide $3,800 by $225,000 including you’ll obtain .017; the is the same as paying 1.7 points, or 1.7% of your loan amount. Discount points reduce your interest rate by .25% for each point you pay. In the case the lender is actually taking back points, raising your interest rate. In the example assuming you originally qualified for a 5.8% mortgage your rate will increase to 6.0%. The difference in your payment amount on a 30 year, fixed rate loan will be approximately $71 per month more without paying closing costs. In the example you save yourself $3,800 because the lender footed the bill for your closing costs. Your monthly payment amount is still $71 higher than it will be, but you’d have to pay almost 4 thousand dollars out of pocket to obtain that rate. If you plan on refinancing the loan in less than 4 years you’re still ahead pertaining to the game by foregoing any closing costs. You might learn more regarding your mortgage refinancing options, including costly mistakes to avoid with a free mortgage tutorial.
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